1. PURPOSE
1.1 The purpose of this Finance and Investment Policy is to provide guidance on the management and investment of CBA Nova Scotia funds to ensure that CBA Nova Scotia conducts its operations and activities in a fiscally responsible manner.
1.2 The Finance Committee will meet at least two times per year to review CBA Nova Scotia’s finances, including to develop and track performance against the budget, monitor the Reserve and Operating Funds and any investments, and ensure compliance with this Policy.
1.3 This Policy remains subject to any additional approvals or signature requirements set out in the Bylaws.
2. NON-BUDGETED EXPENDITURE
2.1 The Board’s approval of the annual budget authorizes the expenditure of funds for those programs, purchases and activities set out in the budget.
2.2 Subject to Article 2.3, any expenditure over budget within a sub-category may be offset by a reduction in spending or a corresponding increase in revenue within the same category.
2.3 The Executive Director must seek approval from the Board for:
- any capital expenditures either not set out in the budget or more than $3,000 of the amount set out for that sub-category of expenditure in the budget; and
- any operational expenditure either not set out in the budget or more than $1,500 of the amount set out for that sub-category of expenditure in the budget.
3. RESERVE FUND
3.1 The Reserve Fund is comprised of those funds held by CBA Nova Scotia that are not allocated in the budget or contained in the Emergency Fund.
3.2 The purpose of the Reserve Fund is to provide:
- funds for a planned or unplanned deficit in any fiscal year;
- funds for special projects;
- funds to increase the Emergency Fund where required; and
- investment income to support the budget. The Reserve Fund is not intended to replace a permanent loss of funds or eliminate an ongoing budget gap.
3.3 The Reserve Fund shall be maintained as a cash reserve and held in a segregated, interestbearing bank account. At the end of each fiscal year, the Executive Director may transfer any surplus cash not immediately required for ongoing operations into the Reserve Fund (i.e., the amount remaining after any deferred revenue, liabilities and budgeted expenditures have been taken into account).
3.4 Monies in the Reserve Fund may only be used where:
- pre-authorized in the budget for that fiscal year; or
- otherwise approved by the Board.
3.5 If the Reserve Fund exceeds $150,000 at the end of the fiscal year, the Board may resolve to invest the excess in accordance with Article 5.3.
3.6 Any interest accruing on monies held in the Reserve Fund is deemed to be investment income and may be deposited in CBA Nova Scotia’s operating account and used for any purposes authorized in the budget.
4. EMERGENCY FUND
4.1 The purpose of the Emergency Fund is to provide sufficient resources to maintain ongoing operations of CBA Nova Scotia or to wind up CBA Nova Scotia in the event of a crisis which severely restricts income to CBA Nova Scotia or requires it to be wound up.
4.2 The Emergency Fund shall be established and maintained at an accumulated amount equal to at least nine months budgeted operating expenditure and invested in accordance with the investment guidelines set out in Article 5.2.
4.3 All drawdown of capital from the Emergency Fund must be approved by the Board.
4.4 The Executive Director, in consultation with the Treasurer, may submit a request to drawdown the Emergency Fund to the Finance Committee, providing an analysis of the proposed use of the funds and plans to restore the Emergency Fund to the minimum amount set out in Article 4.2. The Finance Committee will review the request and make a recommendation to the Board.
5. INVESTMENT GUIDELINES
5.1 CBA Nova Scotia funds shall be invested with the objective of achieving modest capital growth, while also preserving capital, minimizing risk, and providing for ease of access to funds.
5.2 Unless otherwise determined by the Board, the Emergency Fund will be invested in one or more Guaranteed Investment Certificates. The Finance Committee will determine the investment amount, term, required liquidity and preferred Canadian chartered bank for a Guaranteed Investment Certificate, based on the investment objectives set out in Article 5.1 and market availability.
5.3 The Finance Committee may recommend to the Board that any surplus from the Reserve Fund be invested. Such investments may include a certificate of deposit, Guaranteed Investment Certificate, term deposit or other evidence of indebtedness of a major Canadian chartered bank.
5.4 Any modification to invested funds other than as permitted in Article 3 or 4 must be approved by the Board.